USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)

question 134

Multiple Choice

USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)
Assume that the dividend payout ratio will be 75 percent when the rate on long-term government bonds falls to 8 percent. Because investors are becoming more risk averse, the equity risk premium will rise to 7 percent and investors will require a 15 percent return. The return on equity will be 12 percent.
-Refer to Exhibit 9.2. What is the expected sustainable growth rate?

• A) 9.0 percent
• B) 7.2 percent
• C) 6.0 percent
• D) 3.0 percent
• E) 3.6 percent

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Definitions:

Anus

The opening at the end of the digestive tract through which waste material is expelled from the body.

Stomach Ulcer

A sore that develops on the lining of the stomach, often due to infection with H. pylori or prolonged use of nonsteroidal anti-inflammatory drugs.

Lining

Material that covers the inner surface of something, used for protection, insulation, or aesthetic purposes.

Stomach

An organ in the digestive system that secretes acid and enzymes to digest food.